<html><body>
GUEST OBSERVER
It’s pretty common nowadays to see the likes of the Reserve Bank of Australia or the Australian Bureau of Statistics issue warnings about the size of Australian household debt. The reason is that the consequences of poor financial decisions often reach far wider than an individual or family.
The global financial crisis showed us how rapidly financial contagion can spread - one person’s debt is another person’s asset, so when the debt is written off so is the asset. However, there has been little improvement in financial literacy in the wake of the financial crisis, the lack of which was one of the underlying causes.
For instance, surveys just prior to the global financial crisis revealed that many Americans taking out home loans either did not read their loan documents or did not understand them. This meant that, in many cases, they did not understand that they were signing teaser loans where the interest rate starts out very low but increases after a few years.
This lack of financial literacy combined with predatory lending caused the subprime loan crisis, the precursor to the full blown financial crisis.
What is financial literacy?
Financial literacy refers to the ability to make sound financial decisions based on knowledge, skills and attitudes, taking into account personal circumstances.
Low financial literacy is particularly concerning in home loans. In an alarming parallel to the United States before the financial crisis, roughly one third of interest-only mortgagees do not understand that their repayments make no inroads into their debt, and that their interest rates will jump considerably after the interest-only period of the loan has expired.
But it isn’t just that low financial literacy increases risk. It is also important for achieving a productive economy. Economic efficiency requires borrowers to not only have good information but to understand it. This allows them to weigh up the costs of borrowing with the benefits that they expect to receive.
If the information is distorted, either deliberately by lenders or through the misunderstanding of borrowers, they will miscalculate the benefits and capital in the economy will be misallocated. Economists call this market failure, a lot of which occurred in the housing market in the United States before the global financial crisis.
Financial literacy isn’t improving
Evidence suggests that financial literacy has not improved since the global financial crisis, and may have gotten worse.
A survey of adult financial literacy in Australia found that in 2014 the number of people who could actually recognise an investment was “too good to be true” - for example a financial asset promising to pay a return much higher than the going return on similar assets and for no greater risk - had actually declined, to 50% from 53% just three years earlier.
The survey also found that those who recognised that good investments (something with relatively low risk) may fluctuate in value fell to 67% from 74%.
But financial literacy education must also go hand in hand with general literacy and numeracy. The Productivity Commission found that 14% of the adult population had relatively low literacy skills in 2011-12. This is defined as being able to, at best, locate basic information from simple texts but being unable to evaluate truth claims or arguments.
The report also found 22% of the population had low numeracy skills, meaning that they can count, add and subtract and do other basic arithmetic. But they cannot understand statistical ideas, mathematical formula or analyse data.
In other words, a significant proportion of the Australian adult population are not equipped to understand the effect of an interest rate increase on their loan repayments, or understand a loan document that includes an interest rate increase after an initial period.
Fixing the problem of financial illiteracy cannot wait until people are in the throes of negotiating home loans and credit cards. And it should definitely take place before Australians resort to pay day loans.
This was the aim of the Australian Government’s National Financial Literacy Strategy, that ends this year. The strategy proposes a number of educational initiatives including embedding financial literacy in the school curriculum, a formal teacher training program, and development of educational resources and tools.
The strategy draws on similar steps that have been adopted by other countries and recommended by the Organisation for Economic Cooperation and Development (OECD).
The problem is that the curriculum is a crowded space. Financial literacy must compete with the latest fashions in school education as well as traditional curriculum content.
<img src="https://counter.theconversation.com/content/84695/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">Fighting for curriculum space for financial literacy is a political exercise which governments must play hard. For example, by attaching serious funding to the achievement of financial literacy indicators at the school level, and training and certification for teachers. Increasing financial literacy isn’t just in the best interest of individuals, we all benefit from a more literate population.
Ross Guest is professor of economics and national senior teaching fellow at Griffith University.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/financial-literacy-is-a-public-policy-problem-84695" target="_blank">original article</a>.
</body></html>

rguest-QX7SdCCSpj

Financial literacy is a public policy problem: Ross Guest

<html><body>
Author Ross Guest - Professor of Economics and National Senior Teaching Fellow, Griffith University
Australia’s AAA credit rating was under pressure even before the election and is now looking decidedly shaky. Ratings agency Standard &amp; Poors has moved Australia’s rating outlook from “stable” to “negative”, due to debt and a poor chance of budget repair.
This follows warnings from the other major credit rating agencies – Moody’s and Fitch Ratings. The problem is budget repair will only become harder over the coming years, whatever the final numbers in the parliament.
On the parties' approach to budget repair, the Coalition and Labor are virtually indistinguishable as far as the credit agencies are concerned. The May budget projected a deficit (in underlying cash terms) of A$37 billion in 2016-17, gradually falling to $6 billion over the four-year forward estimates.
Labor’s plan is to reduce the deficit from $39 billion to $11 billion over that time. Both Coalition and Labor forecast a return to surplus over the subsequent years and indeed quite large surpluses ten years from now. Budget repair on this scale was utterly implausible before the election and is fiction now.
The government’s so-called “zombie” budget measures were baked into its projections over the forward estimate period. These were mainly the cuts to university funding, family payments and the Pharmaceutical Benefits Scheme. None of these had any prospect of being legislated with the past Senate, never mind with a larger, more powerful set of crossbench senators.
The Parliamentary Budget Office estimates these “zombie” measures to be worth $8 billion in total over the forward estimates. This accounts for roughly half of the difference between the total projected deficits of Coalition and Labor over the same period.
In short, there is little or no prospect of achieving the budget repair that is a pre-requisite for maintaining Australia’s AAA credit rating. Both sides of politics need to spell out to all Australians what this means. The effect of a credit downgrade is like an income cut to households, businesses and government.
It’s similar to the effect of a decline in the terms of trade (relative prices of our exports), and also similar to a loss of national productivity. All of these things effectively reduce our national disposable income. We become poorer as a nation.
Foreign lenders use Australia’s credit rating to set the interest rates that they charge Australian borrowers, mainly governments and businesses. A lower credit rating triggers a larger foreign risk premium in the interest rate that they charge borrowers.
This flows through to the general level of interest rates in the economy, so all firms and households with debts face higher borrowing costs. This can lead to less spending and hiring of workers by firms, and less disposable income for those households.
The major credit agencies are huge private organisations entrusted with capital of shareholders. They make calls about credit ratings not for political purposes but on the basis of what is in the best interests of investors.
The credit agencies are simply making rational assessments. The probability of Australia eventually defaulting on its debt is extremely low, but it is not zero and it is rising, which is important.
The slightly higher risk of default would result in a small downgrade from AAA, as occurred in the 1980s, by the major credit agencies. In turn this would imply higher interest rates, as it did back in the 1980s.
Higher interest rates are definitely bad news for those borrowing. It’s not necessarily good news for those saving either because rates on saving do not increase as much as rates on borrowing.
Also, when rates on overseas borrowing go up because of a larger foreign risk premium in our interest rates, the Australian dollar is likely to fall, as it did dramatically in the 1980s, from US 72 cents to 60 cents in the space of three months. When the Australian dollar falls for this reason our international purchasing power is reduced.
This is quite different to what happens when the Reserve Bank raises interest rates through its control over the official interest rate. In that case the Australian dollar is likely to rise, in the short term at least, which increases our international purchasing power – we can buy more from overseas with our income.
The parliament is like the Roman emperor Nero: “fiddling while Rome burns”, an apt analogy since Europe is where we are slowly headed economically and that won’t be pretty.
To read more from The Conversation <a href="https://theconversation.com/australia-could-be-about-to-lose-its-aaa-rating-and-heres-why-62039?utm_medium=email&amp;utm_campaign=Latest%20from%20The%20Conversation%20for%20July%208%202016%20-%205190&amp;utm_content=Latest%20from%20The%20Conversation%20for%20July%208%202016%20-%205190+CID_873f6ecd844c932714a88a74d5931324&amp;utm_source=campaign_monitor&amp;utm_term=Australia%20could%20be%20about%20to%20lose%20its%20AAA%20rating%20and%20heres%20why" target="_blank">click here.</a>
</body></html>

Australia could be about to lose its AAA rating

<html><body>
The perennial debate about negative gearing of residential property investments has been reignited yet again, by two reports in the past week.
The International Monetary Fund has <a href="https://www.theaustralian.com.au/national-affairs/imf-calls-for-exemptions-to-be-stripped-from-the-gst/story-fn59niix-1227066994700">nominated taxes</a> on housing as ripe for reform in order to improve the efficiency of the tax system. And the Reserve Bank of Australia has <a href="https://www.rba.gov.au/publications/fsr/2014/sep/pdf/bus-house-fin.pdf">argued</a> that housing credit to investors has become excessive and is driving up house prices.
Although neither report specifically recommends changes to negative gearing rules, the mere suggestion that we look at housing taxation or lending for housing investment is enough to awaken the anti-negative gearing lobby.
Before we go on, a definition: negative gearing arises where the interest on money borrowed for investment in an income-earning asset is greater than the income earned from that asset. The asset is said to be negatively geared.
Investors are prepared to bear this income loss if they think the price of the asset will rise sufficiently to more than offset the income loss. What <a href="https://theconversation.com/explainer-why-negative-gearing-is-bad-policy-21882">upsets some people</a> is that the excess of interest over income is allowed to be deducted against income from other sources, such as wages or business income, for the purpose of calculating taxable income.
<a href="https://theconversation.com/its-time-to-abolish-negative-gearing-9879">Critics</a> see negative gearing as the source of all kinds of evils: it inflates house prices making housing unaffordable for first home buyers and inflates a house price bubble that will eventually burst causing wider economic problems; it is an unfair tax handout to the rich; and it bleeds the government’s budget which is all the worse in these times of stubborn budget deficits. And according to some critics there is no upside – negative gearing serves no useful purpose.
House price rises have other causes
Let’s take a look at these claims. House prices have risen by an average of about 10% per year in Sydney and somewhat less in Melbourne in the five years since the global financial crisis. But in the rest of Australia house price growth has not even kept pace with inflation at 2 to 3% annually.
Part of the growth in Sydney and Melbourne is due to investor demand since, as the RBA notes, housing credit growth is running at twice the rate for investors (about 10%) than for owner-occupiers. But even if we think house price growth in Sydney is a problem caused by excessive investment demand, negative gearing is not the prime culprit.
The rules around negative gearing have not changed significantly in Australia for at least 25 years, so it can’t explain house price growth over the past five years. Persistent record low interest rates over the past few years is the main driver, which the RBA <a href="https://www.rba.gov.au/publications/fsr/">acknowledges</a> has meant that loans remain affordable. In fact the ratio of interest payments to household income has actually fallen since 2009.
Sure, if we restricted the tax advantages of negative gearing we would dampen investor demand for housing which would slow house price growth in Sydney and everywhere else. But at what cost? It would be tougher to rent a property, hurting low income households.
Rental vacancy rates are already low in Sydney and Melbourne and in fact have fallen in the last couple of years. Critics <a href="https://www.macrobusiness.com.au/2014/09/hia-continues-negative-gearing-subterfuge/">refute</a> this argument. They say that the vast majority of investment demand is for existing properties rather than investments in new housing stock, which simply drives up house prices. True, but higher house prices make new housing construction profitable, which boosts the rental housing stock. So restricting negative gearing is a very inefficient way of tackling a perceived house price bubble – which in any case is restricted to Sydney and, as I’ve <a href="https://theconversation.com/memo-to-the-imf-there-is-no-housing-bubble-27925">argued</a> before, is not about to burst.
What about the fairness argument? The RBA <a href="https://www.rba.gov.au/publications/fsr/2014/sep/pdf/bus-house-fin.pdf">report</a> shows that negative gearing is by no means restricted to the rich. About half of all housing property investors have household incomes under A$100,000. Half of all household property investors are young – 30% are under age 40 and 60% are under age 50. Also, if we want to be fair we have to be consistent. This would mean tackling negative gearing on other income-earning assets such as company shares and business ownership. And we would have to explain why we would want to tax the interest income received by the lender but not allow the borrower to deduct the interest paid, which would amount to double taxation.
Consider the many alternatives
If we want to tackle fairness in the tax system, there are lower hanging fruit. For example we could bring the family home into the pension assets test, address tax avoidance through artificial structures such as discretionary trusts, and tax superannuation contributions at marginal tax rates (as long as we keep withdrawals tax-free).
The budget saving argument is also overstated. According to the <a href="https://www.ato.gov.au/uploadedFiles/Content/CR/Research_and_statistics/In_detail/Downloads/cor00345977_2011TAXSTATS.pdf">Australian Taxation Office</a>, the total losses on rental property in 2011/12 were A$6.8 billion. Applying an average marginal tax rate of, say, 35%, this amounts to A$2.4 billion in tax revenue forgone, or 0.6% of total tax revenue in 2012. However we would save much less than this if we were to abolish entirely negative gearing for rental property because investors would switch to other investments and other ways of minimising tax.
We need to be clear about what problem we are trying to fix and consider whether there are better ways of doing it.<img src="https://counter.theconversation.edu.au/content/32014/count.gif" alt="The Conversation" width="1" height="1">
Ross Guest is a Professor of Economics and National Senior Teaching Fellow at Griffith University 
He does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/housing-bubble-or-not-negative-gearing-should-stay-32014">original article</a>.
</body></html>

Housing bubble or not, negative gearing should stay

<html><body>
GUEST OBSERVATION
Australia’s house prices are grossly overinflated – if you believe <a href="/expert-insights/buying/imfs-min-zhu-are-we-watching-the-same-movie-again-with-house-price-rises-preceding-a-crisis">the International Monetary Fund’s recent analysis</a>.
It says radical <a href="https://www.imf.org/external/np/speeches/2014/060514.htm" target="_blank">policies</a> are required to deflate this emerging housing bubble, such as a stamp duty on house purchases by foreign residents and government imposed controls on bank lending for housing.
The IMF’s analysis of global house prices – especially with respect to countries like Australia - is misleading. It has focused on two measures of housing affordability: the ratio of house prices to household incomes and the ratio of house prices to rents. On both measures Australia’s house prices are one of the highest in the developed world – higher than the US and almost all of Europe.
In Australia the house price to income ratio is 30% above its historical average, behind only Canada and Belgium among the 22 advanced countries chosen by the IMF. Similarly, the current growth in house prices of 7% in Australia is the 7th highest among the 22 chosen countries.
But the IMF has ignored the <a href="https://www.ahuri.edu.au/themes/housing_affordability" target="_blank">preferred measure</a> of housing affordability, at least in Australia, which is the proportion of income spent on housing costs. For home buyers (not renters) this is best measured by repayments on hew housing loans as a percentage of household disposable income. This measure is now around the average of the last 30 years for Australia at a little over 20%, and falling due to low and stable interest rates.
The typical standard variable housing rate has been at 5.95% since August 2013, which is the lowest rate on record except for a brief period at the depths of the global financial crisis (GFC) in 2009.
Also households are not piling up debt to buy houses like they were before the GFC. Household debt has been flat as a proportion of income since 2007. And household saving is at the highest level for 25 years.
What’s wrong with this picture?
This is not a picture of unsustainable house price growth in Australia. The same generally applies globally given that interest rates are typically even lower than they are in Australia.
It is true that house prices are going up globally, having slumped after the GFC. But even on the IMF’s figures global house prices are still 5% to 10% below their peak in 2007 – and even lower relative to other prices which have gone up over that time.
The IMF is wasting its time asking central banks to worry about house price growth. Central banks in the US, Europe and now Japan are deliberately pumping new money into the economy, and have cut their official interest rates to virtually zero in the hope of stimulating spending and jobs growth in the face of anaemic economic growth. Australia’s Reserve Bank has not had to resort to this, but for others, cheap money and plenty of it is the only policy they have left, given that government debt has reached unsafe levels in most countries preventing them from spending their way to stronger growth. Average government debt in OECD countries is now 110% of national economic output of goods and services.
However, as the famous analogy goes, cheap money is like pushing on a string. It won’t make households spend or businesses invest if they don’t have confidence in their economic prospects. Instead the money goes into assets like housing and the stock market, pumping up those asset prices. Central banks are relaxed about this. Indeed it is deliberate in the hope that rising wealth (on paper at least) will encourage consumption and investment spending. The risk of a housing or stock market bubble is seen as the lesser of two evils – the price that must be paid to try to stimulate spending on goods and services and to create jobs.
Foreign investors are not to blame
One of the IMF’s suggestions – a stamp duty on foreign purchases of investment properties – may have populist appeal to Australians who are worried about Chinese buyers inflating house prices here. It may appeal to the Australian government for this reason as well as being a revenue raising measure – and it is something they could do independently of any Reserve Bank action. But such a policy has dubious merit on balance.
Foreign investment, whether it is in domestic real estate or manufacturing or mining, tends to increase national wealth. If a foreign resident is willing to pay an Australian owner more for their asset than any Australian resident, why shouldn’t the owner sell? The owner’s, and Australia’s, wealth rises. The Australian dollar also rises which transfers income to all Australians since they can now buy goods and travel overseas more cheaply.
Of course not everybody wins. Potential buyers of Australian assets – in this case houses – find that they are more expensive than they otherwise would be. In simple dollar terms, the gains to the winners outweigh the losses to the losers – so in principle the losers can be compensated through the tax and subsidy system.
In short, Australia doesn’t have a house price bubble. Nor probably does the rest of the world at the present time. However even if it did, central banks would not likely do anything about it until their economies start to grow more strongly.
Ross Guest is professor of economics and national senior teaching fellow at Griffith University.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>.
</body></html>

Memo to the IMF: There is no housing bubble

<html><body>
Despite talk of a housing bubble in Australia, house prices have been flat in real terms over the past six years since the pre-financial crisis peak in December 2007. The weighted average of established house prices in Australia’s capital cities has just kept pace with inflation, according to the <a target="_blank" href="https://abs.gov.au/ausstats%5Cabs@.nsf/mediareleasesbyCatalogue/CEE35CDA94704AB0CA257A4C00126898?Opendocument">Australian Bureau of Statistics</a> house price index.
Much discussion has focussed on short-term factors that have supported housing prices since the crisis: Chinese buyers, low interest rates, the switch from shares into property by investors, and the renewed willingness to take on debt since households and investors have repaired their balance sheets post-crisis.
But we need to bear in mind potential long-term drivers of house prices, one of which is population ageing. We’ve known about population ageing in Australia and other developed countries for a long time. It’s like the Queen Mary - we can see it coming from a long way off, but it’s difficult to turn around.
Predicting house prices
There have been some over-hyped predictions about the potential effect of population ageing on house prices in the past. The so-called “asset meltdown” hypothesis was fuelled by some influential <a target="_blank" href="https://www.nber.org/papers/w2794">US</a> <a target="_blank" href="https://piketty.pse.ens.fr/files/PoterbaRESta2001.pdf">economists</a>. They said that the retiring Baby Boomers would sell down their assets, like housing and shares, to pay for their retirement, causing asset prices to plunge. The infamous Mankiw and Weil paper, for example, predicted that US house prices could fall by up to 40% as the baby boomers started to retire between 1990 and 2007. Suffice to say, this didn’t happen!
My <a target="_blank" href="https://econpapers.repec.org/article/blaausecr/v_3a43_3ay_3a2010_3ai_3a3_3ap_3a240-253.htm">research</a> for Australia suggests such a prediction is way out of the ball park (as are many other predictions of calamitous change to be wreaked by population ageing – but that’s a topic for another day). That said, ageing will affect house prices. But it will be a slow-burn effect, occurring gradually over several decades, and the magnitude will be modest.
According to our <a href="https://econpapers.repec.org/article/blaausecr/v_3a43_3ay_3a2010_3ai_3a3_3ap_3a240-253.htm">analysis</a> based on both econometric estimation using historic data as well as predictions from a household behavioural model, ageing will cause house prices to be lower than they otherwise would be, by somewhere between 3% and 25% over the next 35 years.
Two factors drive the effect of ageing on house prices in Australia. First is the declining population share of 35 to 59 year olds who have the highest incidence of property purchases, including both investment and owner-occupied housing. Investment housing has increased as a share of total housing purchases in the last two decades according to <a target="_blank" href="https://www.rba.gov.au/Statistics/Bulletin/D05hist.xls">data</a> from the Reserve Bank of Australia, and it is the 35 to 59 year olds who tend to be housing investors.
Second, older people may trade down in order to release housing equity to support their retirement. The latter effect has, however, become weaker as households have the ability to <a target="_blank" href="https://theconversation.com/your-home-as-an-atm-home-equity-a-risky-welfare-tool-22000">withdraw equity</a> in their house without needing to sell it, through facilities such as equity redraw loans and reverse mortgages.
Housing bubbles and baby booms
The link between house prices and demographic change could also run the other way: from house prices to the population age distribution.
High house prices tend to reduce fertility rates according to the <a target="_blank" href="https://www.nber.org/papers/w17485">international evidence</a>, at least among non-home owners, although it may increase fertility among existing home owners. High house prices reduce the affordability of children for non-home owners, but increases the affordability for existing home-owners by increasing their wealth. In fact given financial and emotional investment in both housing and childbirth it stands to reason that these decisions are related in quite complex ways, and depend on government policies in the areas of family assistance and housing affordability. I plan to investigate these relationships for Australia with co-authors from Macquarie University and the ANU.
One of the lessons from economics is that it’s very risky to extrapolate from the past by drawing straight lines from historic data into the long-term future, for two reasons: the economy has powerful self-correcting forces that we tend to underestimate; and unexpected shocks – Donald Rumsfeld’s “unknown unknowns” – can throw the data off course for a considerable period of time.
This was the fate of Mankiw and Weil’s prediction of a possible 40% fall in US house prices over 20 years – in fact house prices rose dramatically over that period. Compared with the slow-burning effect of population ageing, events like financial booms and crises have a much greater potential to cause swings in house prices over the short to medium term – say five to ten years. And this is the period that matters for most people.
The long term is interesting and we should keep an eye on it. But we’d do well to remember the maxim of the great economist John Maynard Keynes who said: “In the long run we are all dead”.
Ross Guest is head of the department of accounting, finance and economics and professor of economics at Griffith University.
 He is an adjunct professor with the Australia and New Zealand School of Government (ANZSOG) and a national senior teaching fellow with the Australian Government Office for Learning and Teaching.
This article was originally published at <a href="https://theconversation.com">The Conversation</a>. 
 
<img alt="The Conversation" height="1" src="https://counter.theconversation.edu.au/content/22750/count.gif" width="1">
</body></html>

How will Australia's aging population affect house prices?

Brisbane-based <a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co Developments</a> has officially launched its $250million COMO apartment development in Varsity Lakes, while simultaneously commencing construction.&nbsp;

Building work is now underway at COMO following the appointment of <a href="https://www.apartments.com.au/builders/5point-projects">5Point Projects</a> as contractor to deliver the boutique development which will rise on a 2857 sqm site overlooking Lake Orr at 22 Lake Street.

When completed, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO</a> will comprise 156 apartments across 16 levels located in the heart of Varsity Lakes.

[smartcode_project:default project_id=135546 project_image_fid=363515]

The project, which will sit alongside Bond University, will deliver a diverse array of apartment designs comprising one-, two- and three-bedroom residences that have already attracted interest from local and interstate investors as well as an array of owner occupiers looking to gain a foothold in the precinct.

Red &amp; Co, which has largely focused on the Brisbane market in recent years where it has delivered more than 500 apartments and townhouses across 26 projects, has designed COMO to combine tranquil, lakeside living with the vibrant urban convenience of the vibrant Varsity Lakes village.

“We’re thrilled to announce a start to construction of COMO in conjunction with the official launch of the project, our first for the Gold Coast,” said Red &amp; Co Director and Co-Founder David Laverty.

[smartcode_project:default project_id=135546 project_image_fid=363509]

“COMO is superbly positioned to capture the essence of the Varsity Lakes village lifestyle and its thriving café and dining precinct, while delivering a much-needed diverse supply of premium residences for the local market.

“Pre-launch inquiries have been strong among both local and interstate investors and owner-occupiers, including downsizers and upgraders who appreciate the value proposition that COMO represents.”

Prices at COMO start from $1,000,050.

[smartcode_project:default project_id=135546 project_image_fid=363511]

Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, the COMO development incorporates an extensive range of amenities for residents including a 25-metre rooftop lap pool, sundeck, barbecue and dining areas, as well as multiple rooftop pickleball and paddleball courts, a wellness and activity centre, gym, sauna, plunge baths and landscaped gardens.

“COMO presents a rare opportunity to secure a stylish, lifestyle-focused home in one of the Gold Coast’s most sought-after neighbourhoods,” added Laverty.

“The rooftop will be the epicentre of fun for residents with an array of amenities for residents that are quite unique for a boutique project such as this, all while offering spectacular vistas across the Gold Coast as far north as Southport and south to Burleigh.”

[smartcode_project:default project_id=135546 project_image_fid=363514]

&nbsp;

Red &amp; Co has chosen the Varsity Lakes site for its proximity to top-tier schools, major shopping hubs, such as Robina Town Centre and its CBD offering, as well as key Gold Coast transport links, including Varsity Lakes Train Station.

COMO will be located just a short walk to shops, cafes and restaurants in Varsity Lakes and just a 10-minute drive to the Burleigh Heads beachfront.

With construction currently underway, Red &amp; Co anticipates COMO will be completed in 2028.

[smartcode_project_cta:default project_id=135546]

Joel Robinson

Red & Co to launch debut Gold Coast development Como Varsity Lakes as construction commences

Longstanding Gold Coast developer Raptis has acquired a prime development site on Surf Parade for its next Broadbeach apartment project.

Progressing towards completion of <a href="https://www.apartments.com.au/new-apartments/the-sterling-broadbeach-6-8-george-avenue-broadbeach-qld-4218">The Sterling Broadbeach</a>, 90 apartments on nearby George Avenue, <a href="https://www.apartments.com.au/developers/raptis">Raptis</a>, led by second-generation family man Evan Raptis, has picked up a block on the corner of Surf Parade and First Avenue.

The site had been earmarked for a luxury apartment project with 33 full-floor apartments across a 37-storey tower. Raptis will go back to the drawing board and create a building more appropriate for the site. The development application will be lodged later this month.

Evan Raptis told Apartments.com.au the site ticks all the boxes.

"Broadbeach is a suburb we've developed several buildings over the years. Surf Parade ticks all the boxes for the type of apartment development we want to deliver."

Raptis had several pre-lodgement meetings with council to ensure they are aligned in the development.

<img alt="Raptis" data-entity-type="file" data-entity-uuid="f0d58573-07a4-47a8-9f5e-fbf35fb03dc3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-03-05%20at%204.58.23%E2%80%AFPM.png?VersionId=iczZEd_4_o4UL0PHMPJGfy_q3tv96J5i" />

Surf Parade has emerged in recent years as one of the most popular streets in Broadbeach for development.

South East Queensland developer Mosaic Property Group kicked it off with Marella by Mosaic. Bassar Group sold out Infinity on the street, while for its&nbsp;first Gold Coast development, Polycell grabbed a Surf Parade site for <a href="https://www.apartments.com.au/new-apartments/the-rochester-broadbeach-143-surf-parade-broadbeach-qld-4218">The Rochester</a>, which is nearly sold out.

Melbourne-based developer Hirsch &amp; Faigen recently launched its fourth Gold Coast project on the exclusive strip. The Eveleigh Broadbeach will have 100 apartments across a 31-storey building designed by Rothelowman.

GV Property Group site development specialists Antonio Mercuri and Luke Reaby, who both amalgamate sites and sell shovel-ready sites to developers up and down the Gold Coast, sold Surf Parade to Raptis.

Raptis secures prime Surf Parade site for next Broadbeach apartment development

Less than two years after breaking ground, Gardner Vaughan Group is celebrating the topping out of Bask, its second development in the exclusive coastal enclave of Bokarina on Queensland’s Sunshine Coast.&nbsp;

Located only minutes from the beachfront, the two seven-storey luxury apartment towers, known individually as Mydas and Caretta, offer a selection of one-to-four-bedroom residences with views of Lake Kawana, the Glasshouse Mountains, and Bokarina Beach.&nbsp;

[smartcode_project:default project_id=141609 project_image_fid=333359]

Gardner Vaughan Group Commercial Director Sam Gardner said the milestone marks the home stretch for construction, with first residents expected to be able to move in from Spring 2026.&nbsp;

“This is a significant milestone in bringing this development to life and represents our confidence in this region’s long-term growth and appeal,” Gardner said.&nbsp;

“With 85 per cent of apartments already sold, buyers are joining an established, coastal village that offers the very best of the Sunshine Coast – seasonally patrolled surf beaches, renowned restaurants, and links to established health and retail.&nbsp;

“The final collection of three- and four- bedroom apartments range in size from 127sqm to 300sqm, each with two or three secure car parks and storage, and with construction fast approaching completion we don’t expect the last few apartments to remain on the market for long.”&nbsp;

[smartcode_project:default project_id=141609 project_image_fid=333362]

Local restaurateur Luke Stringer, who co-owns and manages the award-winning Bocca Italian and Playa Mexican restaurants in Bokarina, has lived in the beachside suburb for 18 months and worked there for more than three years, and said the beachside suburb was thriving.&nbsp;

“It’s fair to say Bokarina is finally stepping into the sun and there’s a lot to love about the place,"&nbsp;Stringer said.

"It’s such a great community, where you see the same smiling faces every morning and everything’s within easy reach – it’s the perfect hub in the middle of the Sunshine Coast.

“When we first opened Bocca Italian, we were the lone restaurant, but it’s been amazing to see how the area has grown. The more venues that open, the busier it gets for everyone. When Playa Mexican opened its first Saturday night, Bocca had a record night and Playa was packed too, which blew us away how everyone is thriving.&nbsp;

“There’s a great energy around the place now, and people are really embracing Bokarina as a food and lifestyle destination.”&nbsp;

[smartcode_project:default project_id=141609 project_image_fid=363368]

Stringer joined other buyers at Bask Bokarina and the Gardner Vaughan Group team to celebrate the topping out at a special event in February.&nbsp;

Located in Kawana Waters, midway between Caloundra and Maroochydore, Bokarina locals enjoy scenic walking paths around Lake Kawana, playgrounds, beachfront boardwalk and parklands, alongside all the convenience of a masterplanned beachside community.&nbsp;

“You see people jogging or swimming in the morning, then grabbing coffee at the cafes, people are really embracing the area and all this growth is bringing more people to Bokarina,” Stringer added.&nbsp;

To take advantage of the vistas, each of the 135 apartments at Bask is designed with full size windows and high ceilings that provide an abundance of natural light.&nbsp;

Prices for the remaining three-bedroom apartments start at $1,599,000 and four-bedroom apartments start at $3,149,000.&nbsp;

[smartcode_project:default project_id=141609 project_image_fid=363369]

The mixed-use development also features ground-level retail space for cafés, dining options and boutiques, including the soon-to-be-opened ‘Corner Shop’, by the team behind Noosa’s well known ‘Organika’.

Sam Gardner said Gardner Vaughan Group’s 37-year history building and developing across South East Queensland has contributed to the success of its second development in Bokarina, which follows the recently completed Zinc Apartments.&nbsp;

“We care how people live and this is reflected in the way we approach the design and delivery of every development,” he said. “Furthermore, as a builder-developer we have full control over the construction program and our 100 per cent completion rate is something people can draw confidence from.”&nbsp;

Founded by civil engineers Guy Gardner and Darryl Vaughan in 1989, the family-owned business has evolved from a consultancy firm to an award-winning builder-developer, with projects across the Sunshine Coast, Moreton Bay, Brisbane and the Gold Coast.

[smartcode_project_cta:default project_id=141609]

Gardner Vaughan Group tops out Bask Bokarina apartments

Prolific Melbourne developer <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> has launched its fourth new Gold Coast development in as many years.

<a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a>, led by Daniel Faigen and backed by Eddie Hirsch, co-founder of United Petroleum, has unveiled The Eveleigh, on a prime 1,100 sqm site at 7-9 Surf Parade in the heart of Broadbeach.

<a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a> will deliver 100 apartments across 31 levels, making it the company’s largest Gold Coast project to date. It builds on the success of its three earlier developments, <a href="https://www.apartments.com.au/buildings/hemingway-1267-1273-gold-coast-highway-palm-beach">The Hemingway in Palm Beach</a> and <a href="https://www.apartments.com.au/buildings/emerson-kirra-100-musgrave-street-coolangatta">The Emerson at Kirra</a>, both completed, and <a href="https://www.apartments.com.au/new-apartments/yves-mermaid-beach-7-9-mermaid-avenue-mermaid-beach">Yves Mermaid Beach</a>, which is nearing completion.

[smartcode_project:default project_id=149670 project_image_fid=360966]

The announcement of The Eveleigh affirms the company’s sustained confidence in the Gold Coast market which continues to remain undersupplied. It also increases the value of Hirsch &amp; Fa​igen’s Gold Coast development portfolio to more than $700 million since the company first entered the market in 2021 with Hemingway.

The company has enlisted its preferred architecture firm Rothelowman to design The Eveleigh, which will offer a thoughtfully curated lifestyle, including a substantial wellness precinct, communal recreation areas, children’s play spaces, work-from-home facilities, and shared lounge and dining areas.

[smartcode_project:default project_id=149670 project_image_fid=360965]

Designed for the prime market demographic of downsizers and interstate lifestyle investors in mind, The Eveleigh has been crafted to offer an increasingly rare blend of affordable luxury in a tightly held market. Uniquely positioned in the heart of the Gold Coast’s most sought-after lifestyle suburb of Broadbeach, the project will also boast uninterrupted beach and hinterland views.

The Surf Parade site is just a short walk to the bustling Broadbeach dining and retail precinct, Pacific Fair, The Star Gold Coast and convention centre, and an easy stroll to Kurrawa Beach and the recreational amenity of Pratten Park on the Broadbeach foreshore.

[smartcode_project:default project_id=149670 project_image_fid=360975]

“We’re excited to be proceeding with our fourth project on the Gold Coast in what is certain to become the new luxury precinct in Broadbeach,” says Anthony Bueti, the CFO of Hirsch &amp;a​mp; Faigen and a shareholder of the group.

“With the likes of Mosa​ic and Abedian &amp;a​mp; Co also launching quality projects in the area, the transformation will cement Broadbeach as the premier lifestyle and amenity suburb on the Gold Coast.

"After four years in the Gold Coast market, and with three successful projects completed, The Eveleigh is the product of everything we have learned to love about the Gold Coast and it will be an incredible addition to our growing portfolio in one of the most vibrant property markets in the country. We continue to remain very confident in the high-end Gold Coast property market.”

Urban Activation Director Matt George is handling sales for The Eveleigh, having sold out The Emerson, The Hemingway, and Yves, all before construction was completed.

Melbourne builder MAXCON has already commenced construction on The Eveleigh. They are forecasting a mid-2028 completion.

[smartcode_project_cta:default project_id=149670]

Hirsch & Faigen unveils The Eveleigh in Broadbeach

Two years after securing development approval for the final stage of its award-winning Thornton Precinct on the doorstep of Penrith Station, Urban Property Group is set to launch <a href="https://www.apartments.com.au/new-apartments/mayfair-on-penrith-172-lord-sheffield-circuit-penrith-nsw-2750">Mayfair on Penrith</a>, around 400 apartments designed to reflect two of Sydney’s most iconic structures.

The builder-developer has continued refining the design plans for the two-building development on a significant 8,280 sqm site on Sheffield Circuit, recognising the importance of the prime parcel as one of the closest developable sites to the station.

UPG enlisted architecture firm SJB to design the project. The team said they drew inspiration from both the General Post Office in Martin Place and East Circular Quay to help shape the design. The two-level colonnade, in particular, reflects the famous GPO building, which dates back to the 1860s.

[smartcode_project:default project_id=136726 project_image_fid=362014]

There will be one-, two-, and three-bedroom apartments on offer, with interiors by Cox Architecture. Residences will sit above a retail podium featuring hospitality and lifestyle operators such as One Playground and Volcano’s Steakhouse, contributing to an activated ground plane within the broader Thornton precinct.

A communal rooftop with a pool and views towards the Blue Mountains will provide shared open space for residents. The development is positioned between Ron Mulock Oval and Westfield Penrith, with the Nepean River and Great River Walk also nearby, placing daily amenity and green space within walking distance.

&nbsp;

[smartcode_project:default project_id=136726 project_image_fid=362015]

Mayfair is being delivered by Urban Property Group, a family-owned developer and builder with nearly 40 years’ experience across Sydney. The project will be the first in Penrith to be offered with Resilience Insurance’s 10-year Latent Defects Insurance (LDI) policy, which Urban Property Group has adopted across a number of its recent developments. The developer also has a 4.5-star iCIRT rating, one of the best ratings in market providing further confidence to buyers.

Urban Property Group CEO Patrick Elias said providing additional assurance to off-the-plan buyers has become increasingly important.

“Anything we can do to give confidence in our product is a plus,” Elias told Apartments.com.au.

“Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. They’re making their single large investment, which is their home, and providing confidence is something that we feel is paramount.”

[smartcode_project:default project_id=136726 project_image_fid=362020]

The LDI policy provides a 10-year warranty covering structural defects, with independent inspections carried out during construction and protection for owners if defects arise post-completion.

Mayfair represents Urban Property Group’s sixth and final development within Thornton, consolidating the masterplanned precinct immediately east of the station.

The developer, which builds its own projects, has already commenced construction. SRM Residential is handling the sales campaign.

[smartcode_project_cta:default project_id=136726]

Ross Guest

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News